If you wish to sleep straightforward at night time understanding your Tax-Free Financial savings Account (TFSA) portfolio is backed by one thing secure and quietly doing its job, then you definitely may need to take note of the utility sector. Whereas scorching tech shares with excessive development can seize headlines, it might be extremely invaluable to have a strong dividend-paying inventory in your TFSA that does its work without having fixed monitoring.
On this article, I’ll discuss one such inventory, Hydro One (TSX:H), and let you know what makes it an amazing decide for TFSA buyers who worth reliability.
A secure TFSA inventory with robust roots
When you don’t realize it already, Hydro One is Ontario’s largest electrical energy transmission and distribution supplier, with a big buyer base throughout the province. The corporate’s important service brings a stage of dependability that TFSA buyers usually search for.
After climbing practically 20% during the last 10 months, Hoydo inventory is at the moment buying and selling at $52.74 per share with a market cap of $31.6 billion. On prime of that, it provides a 2.5% annualized dividend yield, which is paid out quarterly. Whereas the dividend isn’t the very best on the TSX, it’s constant and backed by its sturdy enterprise mannequin.
Power in outcomes and stability
Hydro One’s newest monetary development traits clearly present why it’s thought-about one of the crucial reliable shares in Canada. Within the second quarter of 2025, the corporate’s income climbed by practically 2% YoY (year-over-year) to $2.1 billion. Extra importantly, its adjusted web revenue for the quarter jumped 12% YoY to $327 million. In consequence, the hydro producer’s adjusted earnings additionally grew over 10% from a 12 months in the past to $0.54 per share.
This robust earnings development was largely pushed by larger vitality consumption throughout the province and new transmission and distribution charges accepted by the Ontario Power Board. Whereas Hydro One’s depreciation, amortization, and financing costs additionally elevated within the newest quarter, the corporate nonetheless managed to increase margins, reflecting the power of its regulated operations.
And this isn’t nearly one robust quarter. Over the past 12 months, Hydro One has proven a YoY improve of 8% in income and 11.7% in adjusted earnings.
Large plans to energy future development
Along with robust numbers, Hydro One’s ongoing funding in modernizing and increasing its community to fulfill Ontario’s rising vitality calls for makes it an much more enticing inventory for TFSA buyers. Within the second quarter alone, the corporate made $913 million in capital investments, which included putting $591 million in new belongings into service.
One main mission that highlights its long-term imaginative and prescient is the St. Clair Transmission Line. As soon as accomplished, this line will ship 450 megawatts of unpolluted electrical energy to southwestern Ontario, which is sufficient to energy a metropolis the dimensions of London. This mission can also be being developed in partnership with First Nations by way of a 50-50 fairness mannequin.
Constructed to be a long-term TFSA anchor
What makes Hydro One a sleep-easy inventory is its constant dividends and powerful monitor report of delivering enticing returns to buyers. Because the province continues to develop, so does the electrical energy demand. And this development is prone to profit Hydro One. So, for those who’re trying so as to add one thing secure, important, and rewarding to your TFSA, Hydro One is certainly value contemplating.
